FASZZ TECHNOLOGY (M)
The 1st Super HALAL Platform In Malaysia
Muslim consumers have long been compromising with the uncertainty and lack of transparency along the food delivery supply chain. On the other hand, riders are concerned about the food and drinks they come in contact with and the fluctuating pay despite demanding work nature, leading to a growing sense of insecurity.
Faszz is ready to disrupt the market as the only Halal-certified online food delivery platform, and with plans to become a Super Halal Platform in Malaysia. For investors, this is a business with limited downside and huge upside potential.
You may be thinking, are they out of their mind to venture into the online food delivery business and fight GFood and PinkyFood?
Let’s address the elephant in the room.
Being an MDEC GAIN Programme company, eRezeki-certified company and Exabytes’ e- commerce platform partner, Faszz is led by a practical and responsible management team with profitability and sustainability at the top of their mind (back to the basics of business, or should we say old school?).
Dato Ishak, a serial entrepreneur and the founder of Faszz, consulted seasoned industry players, collaboration partners and merchants to validate the market gap. He then fine-tuned the whole business model to ensure optimum user experience, stability, scalability, and cost-efficiency. It is a well-thought-out game plan, and Faszz commits to creating long term value for all stakeholders.
Above all, they will employ the Blue Ocean Strategy by being the only Jakim Halal certified food delivery service platform in Malaysia. The end-to-end certification is not limited to delivery service, but it also covers e-hailing and e-wallet. It took the founder and his team 9 months to go through the tedious application and audit process. Eventually, they overcame the challenges and obtained the Halal certification in November 2019.
How important is this Halal certification, really?
Both GFood and PinkyFood have been trying to get their hands on this certification but to no avail, because it would not only require a major revamp of their current system but also continuous compliance.
Both GFood and PinkyFood acknowledge the growing significance of Muslim users and that is why they on boarded Halal-certified restaurants on their platforms and have been incurring substantial extra cost in the past few years to build that trust with the Halal community, a seemingly never-ending pursuit. But as it stands, their platforms and their whole supply chains are not Halal-certified.
This certification by JAKIM truly sets Faszz apart. Faszz’s laser focus on obtaining the Halal certification is expected to pay off big.
After receiving the certification, Dato Ishak spent yet another 9 months meeting over 200 merchants, including the biggest F&B chains in Malaysia. In addition, the IT team continues to stress-test the app that is now downloadable on Google Play Store, Apple App Store, and soon Huawei AppGallery.
Faszz is well-positioned to capitalize on this first-mover advantage to grab a share of this high-growth, high-value market.
At the end of the day, Faszz sincerely hopes that every time we place or fulfill an order, we know that we are doing the right thing for the society, economy, merchants, riders and ourselves.
Do Muslim food delivery app users really care about the Halal certification as they have been ordering food from existing available apps all this while?
Yes, if given an option. We all love Malaysia as the melting pot of diverse cultures, and we respect each other’s faith.
However, the struggle is real for Muslim food delivery app users. For non-Muslims, you would have noticed your Muslim colleagues or friends putting more efforts to sanitize their food containers and cutlery whenever they order food delivery. You would have seen similar behaviour if you share the same pantry with them.
Sometimes when Muslims unintentionally touch non-Halal food, kitchen utensils or cutlery, they pray (doa) to ask for forgiveness. It’s all about having that peace of mind. They would pray to be safe rather than sorry.
Indeed, Muslim users have been compromising with the lack of transparency along the food delivery supply chain, especially in several touchpoints. For example, are all riders Muslims? How often is the food mixed up or drink spilled, resulting in cross-contamination in the delivery bags?
On the other hand, riders are equally concerned about the food and drinks they come in contact with and the fluctuating pay despite the demanding work nature, leading to a growing sense of insecurity.
The inconvenient truth is, COVID-19 will be around for at least 2 more years. Hygiene will be a top priority for every customer. However, the sanitization of food delivery bags is in question, according to an article by The Star in May 2020.
“As a regular customer of such services, I don’t want to get infected by the virus … I also don’t want them (food delivery riders) to create a new cluster,”
said Huzairi, who hails from Kajang, Selangor.
— Daily Express (April 2020)
So how exactly do you plan to solve this problem?
The app is built by Faszz’s in-house experienced IT team, the same team who have built complicated IT systems for Bank Rakyat, Tabung Haji, PRIMA and VIVO. The app is complete with all the intuitive features that customers and riders are familiar with. Hence the switching process is relatively easy and seamless.
Faszz only onboards Halal-certified F&B outlets and employs Muslim riders. Unlike other existing apps where users need to make a few clicks to filter the Halal options, every menu item on the Faszz platform is Halal. Not only can we place our orders faster, but the overall user experience is also better.
All Faszz’s delivery bags will be frequently sanitized at its designated service points to better protect its employees, partners, and customers from COVID-19.
Perhaps the most practical value proposition for users is that the prices of the same food would be generally lower on the Faszz platform than other food delivery platforms, especially for bulk purchases. This is because Faszz will take less from the merchants, and pass on the value to consumers. However, Faszz will make up for that with their strategy to increase the transaction value per order and load factor per trip.
For riders, Faszz has designed a better remuneration and reward system compared to GrabFood and Foodpanda. Their FAIR Program, which is also the ‘secret sauce’, will undoubtedly make Faszz riders’ work much happier, safer and more meaningful. Faszz believes that if they take good care of their riders, the riders will take extra care of their customers.
After all, business needs to be socially enriching.
The online food delivery service is made up of a few key elements:
Riders: Muslims, trained and highly-motivated to provide good service
F&B Outlets: Halal-certified, variety of menu items, reasonably priced
Mobile App: Syariah-compliant, user-friendly, ready to support grocer delivery service and e-commerce store in the future
No food delivery service platform can survive without a fleet of highly-motivated riders. 90% of the food delivery riders in the market are Muslims, and over 200 have expressed a strong interest in joining Faszz due to their precise positioning and FAIR Program. The riders will undergo Halal SOP and customer service training.
To ensure users get a wide variety of choices on the Faszz platform, Dato Ishak has been actively onboarding merchants. Within 3 months, Faszz has 60 merchants, and with the funding to expedite the operations, they expect to have at least 500 merchants by the end of 2020.
Faszz’s service is presently available in the Klang Valley with plans to gradually establish their presence in other big cities.
Although Faszz delivers Halal food, that does not mean that they are restricted to serving Muslims only. Everybody is welcome to order on Faszz if they are getting more value from the platform, e.g. lower price, hygienic, on-time delivery, excellent customer service etc.
Muslim families tend to be generally bigger. Designing the system to cater to them will benefit Faszz and its merchants in the sense that the transaction value per order is higher, thereby increasing the profit margin.
Faszz earns by taking a cut from every transaction on their platform.
Pros of being a late market entrant:
- Early players have experienced trials and errors to fine-tune the system and educate the market. They have burned millions if not billions of ringgit in research & development (R&D) and advertisement & promotion (A&P). However, late entrants can learn the best practices, further enhance them, and then direct their focus on branding and marketing activities with high conversion rates.
- Example: Dato Ishak, who has extensive experience in the media industry, will leverage his network of celebrities, influencers and religious leaders to promote the app amongst its target customers.
- Replicate the success formula like how to achieve optimum profit margin per trip.
- Example: Faszz’s first batch of riders would be full-time hires. Based on prudent calculation, Faszz will earn a higher margin and save on retraining costs (due to the high turnover rate and inconsistent service quality plaguing the industry).
- Identify cost-saving opportunities along the fulfillment process
- Example: Faszz’s various equipment suppliers agreed to give them leasing or installment plans with reasonable interest rates. This significant savings on CAPEX allows Faszz to stay asset-light and flexible, and as such, have more cash to grow their business.
Is the market big enough?
The Online Food Delivery Industry:
According to Statista Market Forecast (2020), Malaysia’s online food delivery market is valued at USD192million, comprising 6.2million users.
A conservative 5% market share would enable Faszz to provide a significant return to all its stakeholders.
Faszz is confident of achieving this result with a series of cost-effective growth strategies. Dato Ishak, who has extensive experience in the media industry, will leverage his network of celebrities, influencers and religious leaders to promote the app.
The Halal Industry:
We may have come across several wildly successful Halal brands before, but little do we know that Malaysia’s Halal industry market value is expected to reach USD147.4 billion (approximately RM614.36 billion) by 2025, according to the Halal Industry Development Corporation (HDC).
Maybe some are indifferent to the Halal status, but we know that many consumers care, especially the elderly and the staunch Muslims. Published research presented in the International Halal Conference also revealed young Muslims’ positive attitude towards Halal food outlets and JAKIM's certification.
Faszz is the alternative they have been waiting for. They are ready to switch to Faszz or even start ordering food delivery for the first time because of Faszz.
Indeed, Muslims make up 60% of Malaysia’s population. Assuming that food delivery service users are representative of the general population, it makes perfect business sense to target this market segment. Renowned international brands such as Uniqlo has also catered to the Muslim market by offering Muslim-wear collections.
Is it the right timing to enter this market?
Yes. According to the Mastercard Impact Studies for May 2020 edition, Malaysians are increasing their online activities, including food deliveries.
Undoubtedly, the pandemic has changed our day-to-day activities and consumer spending behaviour. According to an article in The Star newspaper, more new merchants have joined the food delivery platform since the pandemic started. The merchants have seen an increase in online revenue since joining the platform.
This is the excellent timing for onboarding merchants and gaining users.
Yes, Faszz is not going head-on with the big players. This is not a zero-sum game where other players will be harmed as Faszz grows. Instead, they are creating a new market that did not exist before. It was not too long ago since GFood and PinkyFood started the trend (at a huge cost).
There are still people who hesitate to order food delivery or become a rider because of the potential risk of contamination and insecurity due to the demanding work nature. Faszz will provide that peace of mind, hence ‘activating the market’ and ‘making the pie bigger’.
But if we really must, let’s compare with the 3 most popular online food delivery companies in Malaysia.
The general perception of the existing platforms is as below:
- Expensive food price
- The reward points can hardly be enjoyed nowadays as their value gradually decreases over time
- Expensive food price
- Complaints on rude riders as well as HQ customer service
- Hygiene issue as they also deliver food prepared by roadside stalls, posing legal and health risks
- Small number of riders, especially during bad weather
Existing players have been engaging in a price war to put each other out of business in the hope of a monopoly in the future. Although users benefit from the offers now and then, this is not sustainable. In war, no one wins. The interests of all stakeholders, including the riders who depend on the income from food delivery, are at stake. Faszz wishes to change that.
Faszz would focus on their own cost-efficiency and real value creation to the users, riders, and investors who are aligned with their value system.
Faszz Technology is aiming to raise up to RM1.5m through this Equity Crowd Funding round at a pre money valuation of RM10m.
To be a Super Halal Platform in Malaysia
Dato Ishak Mohd Ishtiaq is entrepreneurial and influential. He is good at developing innovative business models that launched his company to the next level and paved the way for a new cycle of corporate growth. In recognition of his accomplishments, his company has received the following awards in the past:
- Star Outstanding Business Award (SOBA) 2018
- Malaysia International Business Awards 2017 - Excellence in Digital Media
- The Golden Bull Award 2017 Outstanding SME
- SME 100 Fast Moving Companies 2016
- Selangor Excellence Business Awards 2016 On Media Publication
Dato Ishak is confident in compounding his competitive advantages in the market (such as consolidating other small players to produce synergy). This advantage allows Faszz to grow big in the booming Halal market and potentially get acquired for the benefit of all stakeholders.
A dedicated team with combined experience of 30 years in app development, e-commerce, media management, food delivery, e-wallet and data analytics.
Innovation is the key driver for the media and advertising industry. Dato Ishak spearheaded his team to convert 500k impressions on Everyday Carry (EDC) receipts printouts to the advertising space. The idea behind it was to capture the potential customers or users’ attention when they top up their mobile credit or make payment for their monthly utilities. They did this successfully in collaboration with e-pay (M) Sdn Bhd. Some of the clients have seen engagement and increase in revenue of more than 40%.
They also did the first-of-its-kind branding campaign with Subang Airport for Bank Rakyat where the brand awareness increased by more than 50%, on top of the increase in deposits and card subscription.
Dato Ishak’s team is duly recognised by the industry for their execution capability.
- No shares will be allotted or issued based on this document after six months from the closing of the offer period.
- This issue, offer or invitation for the offering is a proposal not requiring authorisation of the Securities Commission under section 212(8) of the CMSA 2007.
- This document has not been reviewed by the Securities Commission Malaysia. The Securities Commission does not recommend nor assumes responsibility for any information including any statement, opinion or report disclosed in relation to this fund raising exercise and makes no representation as to its accuracy or completeness. The Securities Commission expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the information disclosed.
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